SD universities consider giving need-based aid

By Bob Mercer

State Capitol Bureau

At the annual planning retreat next week, one of the decisions facing the state Board of Regents is whether to ask the Legislature for $3 million next year to put in a trust account, so the earnings can be used to help provide need-based grants to students.

The $3 million is one of a dozen budget requests under consideration by the regents for the state’s public universities. Most of the requests aim at reducing expenses for students in various ways, such as tuition buy-downs and expansions of the Opportunity scholarships.

The regents also will focus at the two-day retreat on enrollment trends and projections, which show the head count of South Dakota students physically attending the state universities declined slightly in recent years, while overall enrollment increased because of distance-learning courses and non-resident students.

Population forecasts indicate South Dakota will see more high school graduates in the coming decade, while nationally the numbers of high school graduates will be flat. Those trends point toward more competition in recruiting non-resident students and more emphasis on making state universities affordable for South Dakota students.

This year the Legislature provided money for need-based aid for the first time. Lawmakers put $1.5 million into an investment account to generate earnings that can be used for the aid. They also earmarked $200,000 as start-up funding so some aid can be available this budget year.

The program requires the university to provide $3 of matching funds from private sources for every $1 from the state fund. State universities as well as other post-secondary institutions statewide could participate.

The regents estimate that having $4.5 million invested – the $1.5 million approved this year and the additional $3 million that could be requested – would generate nearly $180,000, based on a 4 percent annual return, for the 2016 budget year. If that is leveraged through a 3-to-1 match, the result would be $720,000 in need-based aid.

Senate Republican leader Russ Olson of Wentworth led the drive in the Legislature for need-based aid in the 2013 session. The final version of the plan, SB 237, won approval 35-0 in the Senate and 54-15 in the House of Representatives, where the opposition came from a mixture of Democrats and members of the Republicans’ “new conservatives” wing.

The legislation set parameters of at least $500 and a maximum of $2,000 per student.

Olson said Thursday he was a realist and settled for the seed money in 2013. His opinion is that the Legislature, based on its votes for the 2013 legislation, would look favorably on providing more money in 2014 for the trust fund if it can be afforded.

“If the trend of increased revenue, bundled with frugal department spending and reversions continues, I would like to see the Legislature place a priority of making sure that access to higher ed isn’t limited to families of means,” Olson said.

A financial analysis prepared by regents’ central staff found that all six state universities had significant price differences when student aid was made part of the calculation. Because other institutions outside South Dakota awarded more aid, the net prices for the South Dakota state universities were higher in comparison to their peers.

Northern State had the smallest difference of $939 higher. Next was Dakota State at $1,797, followed by South Dakota State at $2,247; University of South Dakota $2,677; Black Hills State $3,004; and School of Mines and Technology $3,210.

One conclusion expressed in the analysis stated: “Utilization of the net price calculator by any student seeking to determine which institution provides the most affordable sticker price is increasingly likely to encourage families to pursue postsecondary opportunities outside the state (South Dakota).”

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